Atlanta’s car economy, stalled by coronavirus, tries to shift gears

On a typical spring weekend, tens of thousands of spectators cram their vehicles into the parking lots surrounding the Atlanta Motor Speedway to watch drivers careen around the track at upwards of 140 miles per hour.

More than two months into the pandemic, the racetrack is quiet and the stands are empty. The Speedway’s lots are full — but not with NASCAR fans.

Thousands of unused Enterprise rental cars are now parked there. So is Filet of Chicken, a local poultry processor, selling meat from refrigerated trucks.

Before the coronavirus, Atlanta daily life — and much of the city’s economy — revolved around cars. Residents shelled out $8,167 a year on their vehicles, according to the Center for Neighborhood Technology. They spent more time in them commuting than almost anywhere else in the country, nearly 500 days over a lifetime, according to one estimate. When they were not stuck in traffic, they flocked to venues like the Speedway to watch others race.

COVID-19 has pumped the brakes on all of that.

Car dealerships and service shops saw upwards of half their revenues evaporate as lockdowns began in mid-March. Rental car company Hertz is teetering on the brink of bankruptcy as travel has ground to a halt. With restaurant dining slow to return, valets have few cars to park. Traffic at car washes, parking decks, body shops, emissions testing sites and gas stations has dried up. Many businesses have reduced hours and laid off workers.

Things are slowly starting to improve, according to local business owners interviewed by The Atlanta Journal-Constitution, but the prospect of a long-term economic downturn has some experts predicting the car industry will look much different once the pandemic is over.

“The firms that are going to suffer the most are the ones that were on the edge at the beginning,” said Patrick McCarthy, a Georgia Tech professor who specializes in transportation economics. “Those firms are going to have a lot of trouble coming back.”

An aerial photo shows thousands of rental cars from Enterprise parked in the lots surrounding the Atlanta Motor Speedway in Hampton on May 12, 2020. The coronavirus has caused rental car demand to plummet so Enterprise sought a place to store its cars. (Hyosub Shin / Hyosub.Shin@ajc.com)

Photo: The Atlanta Journal-Constitution

‘Off the cliff’

Perhaps no corner of the automotive world has felt the squeeze as acutely as auto makers and dealerships.

Manufacturers shuttered factories or shifted to making personal protective equipment. Georgia’s only car assembly factory, Kia Motors’ facility at West Point, stopped production in March before reopening earlier this month.

Dealers in mid-April reported an average sales decline of 71% in a survey conducted by Cox Automotive, which auctions cars. That was before Cox Automotive announced it would furlough 12,500 of its own workers because of plunging demand. (The AJC and Cox Automotive share the same corporate parent.)

Many consumers are wary of visiting dealerships in person, and some who are facing uncertain prospects at work are postponing major purchases such as new cars.

Jimmy Ellis, CEO of the Jim Ellis Automotive Group, compared business in late March to “falling off a cliff.” Sales at his 18 dealerships fell some 50%. Brian Long, general manager of Classic of Atlanta, said sales at the Subaru and Cadillac dealership were initially off 70% and 15 workers were laid off.

Dustin Monacelli works on a customer’s car at Eddie’s Automotive Service in Lilburn on May 13, 2020. STEVE SCHAEFER / SPECIAL TO THE AJC

Photo: The Atlanta Journal-Constitution

Consumers also have put off maintenance work.

Eddie’s Automotive in Lilburn has been in business for 32 years. Owner Eddie Price considers himself lucky: he’s saved up some reserve funding, has a loyal customer base and has paid off a lot of the large equipment in his repair shop.

That wasn’t enough to stave off a 70% decline in revenues after Georgia’s shelter-in-place order was first instituted in early April. Price kept his shop open, but with the phone barely ringing, he opted to cut operating hours from 10 to eight hours a day.

“I’ve never worked a 9 to 5 job in my whole entire life,” Price said. “But I told the guys this (waiting around) is not healthy.”

Business at Eddie’s has since picked up — it’s now about half what it typically is — but Price says he’s dipping into his reserves to help cover the bills. A federal Paycheck Protection Program loan has also helped make ends meet.

In a sign of the times, for $29.95, Price’s shop is offering a special disinfecting treatment. A generator circulates ozone gas that kills viruses, bacteria and odors. Price also runs the machine in the office before he locks up for the evening.

Arron Devoe works on the brakes of a customer’s car at Eddie’s Automotive Service in Lilburn on May 13, 2020. STEVE SCHAEFER / SPECIAL TO THE AJC

Photo: The Atlanta Journal-Constitution

Business has been even more challenging for Zach Wojohn, CEO of Executive Parking Systems, which parks cars outside of restaurants and special events such as weddings and graduations. With large gatherings indefinitely postponed and in-store dining coming back slowly, Wojohn has scrambled to find additional revenue and slashed hours for many of his 120-plus employees.

An idea to deliver for a local grocer and restaurants didn’t advance far due to insurance reasons. But Wojohn found a niche at senior living facilities, with his valets acting as liaisons between delivery men, outside visitors and the staff. The business also has moved excess inventory for car dealers and manned a downtown parking deck.

Wojohn has used the downtime to try to solve a problem that’s dogged intown valets: car theft. He’s developed a sturdier valet podium with an aluminum, rust-proof safe with a thicker door, grade 1 deadbolt and key fob entry. It’s patent pending and made in Decatur.

Long-term changes

Other car-related businesses also are adjusting in a bid to stay in business.

Nearly half of independent car dealers surveyed by Cox Automotive on May 1 said they were concerned about closing for good.

Thousands of rental cars from Enterprise parked at parking lots of Atlanta Motor Speedway in Hampton on Tuesday, May 12, 2020. The coronavirus has caused rental car demand to plummet so Enterprise sought a place to store their cars. (Hyosub Shin / Hyosub.Shin@ajc.com)

Photo: The Atlanta Journal-Constitution

Many dealers and mechanics are going to customers’ homes for test drives, pickups and deliveries. Staff are wearing personal protective equipment and coverings the seats and steering wheels with protective coverings.

AAA’s half-dozen metro Atlanta Car Care Plus locations now offer curbside, no-touch service for customers to drop off their cars without entering the shop, according to Ron Seay, area manager for the company’s Auto Club Group. Other businesses are offering mobile maintenance at a person’s home.

Seay’s shops now offer free car pickup and delivery for essential workers, a service many dealers and mechanics have extended to all customers.

“The customer never has to step foot in the store,” said Kevin Kolb, president and general manager of Potamkin Hyundai Stone Mountain. “We absolutely will continue to do that after the pandemic is in our rearview mirror.”

Others have gotten creative with their advertising.

Atlanta-based Mammoth Holdings, which owns Swifty and more than a dozen carwashes across the metro area, invites Facebook users to visit one of its locations and indulge in “three minutes of normalcy.”

“Do you want a safe way to get out of the house?” one recent post states.

Monthly subscriptions make up the majority business at Mammoth’s shops, and after seeing an initial decline in visits they’ve recovered almost completely, said CEO Gary Dennis. Demand isn’t as high among customers seeking a single wash, he said.

Dustin Monacelli inspects a customers’ car at Eddie’s Automotive Service in Lilburn on May 13, 2020. STEVE SCHAEFER / SPECIAL TO THE AJC

Photo: The Atlanta Journal-Constitution

Some promising signs

Some in the automotive industry see a light at the end of the tunnel.

The convenience stores that line Georgia’s highways have started seeing more customers after the shelter-in-place was lifted, according to Angela Holland, president of the Georgia Association of Convenience Stores.

Car dealers said they’ve seen an upswing since mid-April.

Long, at Classic of Atlanta, bested his downbeat April forecast by 54%. He said early May sales are almost on track for a normal, non-coronavirus month.

Many plan to seize on the Memorial Day holiday, traditionally a big sales weekend, despite the pandemic. But it will have a different feel. Ellis is planning what he’s calling an at-home sales event: all transactions will occur online, a staff member will deliver the car to the customer’s home and a portion of the proceeds will go to the Atlanta Food Bank.

Many now see online sales as critical to the future of auto dealers, where customers can browse car models, get their credit approved, have a trade-in appraised and do many other steps traditionally done in person at dealerships. Ellis said roughly three-quarters of his sales in recent weeks have been largely over the internet.

But not every buyer is ready to go that route. Even if they complete most steps online, some still want to go to the dealership for a test drive.

“They really want to touch it, see it, feel it, experience it before they sign up for that type of a commitment,” said Kolb, the Hyundai dealer.

An aerial photo shows thousands of rental cars from Enterprise parked in the lots surrounding the Atlanta Motor Speedway in Hampton on May 12, 2020. The coronavirus has caused rental car demand to plummet so Enterprise sought a place to store its cars. (Hyosub Shin / Hyosub.Shin@ajc.com)

Photo: The Atlanta Journal-Constitution

Some dealers believe there will be a coronavirus-related sales bump in the months ahead as people return to the office but want to avoid contracting the virus via public transportation or rideshares.

Back at the Atlanta Motor Speedway, about 20 miles south of Hartsfield-Jackson International Airport, the venue has hosted blood and food drives for local charities and the Henry County School System, said Brandon Hutchison, the general manager.

On Thursday, Gov. Brian Kemp announced the Speedway’s biggest event of the year, the Folds of Honor Quiktrip 500, will be held on June 7 without spectators and limited personnel in attendance. Organizers had postponed the event, which is normally in March and draws roughly a quarter-million fans.

In the meantime, some drivers have used the slowdown to treat Ga. 400 and I-285 like their own personal NASCAR tracks. Dozens of people have been pulled over for driving over 100 miles per hour there in recent weeks.

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